Sunil Poonamchand Saraf Vs PCIT (ITAT Ahmedabad)
Ahmedabad: The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, has partially set aside a revisional order passed by the Principal Commissioner of Income Tax (PCIT) that had directed the Assessing Officer (AO) to mandatorily add an amount of Rs. 4,07,97,829/- as accommodation entries in the case of Sunil Poonamchand Saraf for the Assessment Year 2013-14. While upholding the PCIT’s jurisdiction to initiate revision proceedings, the Tribunal found the specific direction to make the addition without further verification to be beyond the scope of Section 263 of the Income Tax Act, 1961.
The case originated from the assessee’s return of income for AY 2013-14, declaring a total income of Rs. 1,99,610/-. Subsequently, the assessee’s case was reopened under Section 147 of the Act based on information identifying the assessee as a potential beneficiary of accommodation entries totaling Rs. 4,07,97,829/- from the Dishman Group of entities across five financial years (2011-12 to 2015-16). The reasons recorded for reopening specifically mentioned transactions of “fictitious loan” with M/s. Dishman Pharmaceuticals & Chemicals Limited for AY 2013-14, supported by evidence found during search and seizure action. An assessment order was eventually passed under Section 147 read with Section 144B on March 26, 2022, accepting the returned income without making any addition concerning the alleged accommodation entries.
